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9IFRS_a_2

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Intermediate Accounting (Kieso)
Found in: Page 1468

Short Answer

Snider Corporation, a publicly-traded company, is preparing the interim financial data which it will issue to its shareholders at the end of the first quarter of the 2017–2018 fiscal year. Snider’s financial accounting department has compiled the following summarized revenue and expense data for the first quarter of the year.

Sales revenue $60,000,000

Cost of goods sold 36,000,000

Variable selling expenses 1,000,000

Fixed selling expenses 3,000,000

Included in the fixed selling expenses was the single lump-sum payment of $2,000,000 for television advertisements for the entire year.

Instructions

a) Snider Corporation must issue its quarterly financial statements in accordance with IFRS regarding interim financial reporting.

2. State how the sales revenue, cost of goods sold, and fixed selling expenses would be reflected in Snider Corporation’s quarterly report prepared for the first quarter of the 2017–2018 fiscal year. Briefly y justify your presentation.

In the annual report, sales income, cost of goods sold, and other costs should all be treated equally.

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Step by Step Solution

Meaning of IFRS

The IFRS is a set of accounting principles that are used globally. It's also recognized as a collection of principles-based standards that are simple to comprehend and apply.

Explaining the revenues and expenses that should be reflected in Snider Corporation’s quarterly report

The quarterly report for the first quarter of the financial year 2017-18 is as follows:

Sales revenue

$60,000,000

Cost of goods sold

36,000,000

Variable selling expenses

1,000,000

Fixed selling expenses

Advertising

2,000,000

Other

1,000,000

Sales revenue and cost of goods sold and other expenses should be given equal treatment if it were an annual report. In addition to product costs, costs and expenses should be charged to expenses as they are incurred in the interim period.

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